Episode Summary
In this episode we discuss how to prepare for a job loss, even if you think one isn’t coming. Things have gotten pretty serious around the world in the last few weeks and this very day 3.3M people filed for unemployment. people are predicting unemployment could be as high as 30% this year. We recommend you have or start an emergency fund, start cutting costs, and prepare for the worst. We can still hope for the best, while preparing for the worst. The good news is, you don’t need to spend much money to be happy in life.
Episode Notes
Mike and Maggie advise that everyone should live as if they’ve already lost their job, and then be delighted everyday that they continue to remain employed. A job can be taken away at any moment, for any reason. We all need to be emotionally and financially prepared for losing our jobs at any moment, especially now.
After Maggie shares a story about how one of her long-time heroes and mentors has been listening to their podcast, they jump into the topic at hand and share their tips:
- Start an emergency fund now. For the year ahead, we advise much longer than the typical 3-6 months. You should ideally have 1-2 years saved up. Yes, that may sound aggressive, but it will feel amazing to have that kind of an emergency fund in place. You’ll feel invincible!
- One way to double the size of your emergency fund overnight is to cut your living expenses in half.
- To create an emergency fund, you may need to adjust your lifestyle and expenses.
- Understand how much money it costs you to live off of. Create your bare-bones budget so you know how much you need in your emergency fund.
- Stop spending money now.
- Yes, you may want to support local businesses and that’s admirable, but if you do not have an emergency fund in place yet, then you should be supporting your family “business” before you support other things. We know this may sound unpatriotic or self-serving, but it’s the responsible thing to do right now. Put the oxygen mask on yourself before you can help others. An emergency fund is your oxygen mask.
- Start expense tracking right away, so you know where every dollar is going. Listen to our Expense Tracking Gone Wild Episode #15 for more detailed guidance and we offer a suggested template.
- Consider cancelling things you’ve already signed up for, it’s often not too late if you call within a few days of your credit card being charged.
- Cancel anything and everything you can. Then look through things again, and cancel more.
- Do some crazy frugal things you never considered doing to save money. Listen to our Crazy Frugal Stuff We Do Episode #17 for some ideas.
- Enable credit card notifications on your phone so you get a push message or text every time you have a credit card charge. It will make you more aware of where your money is going on a day to day basis.
- Make this your new motto: If I was unemployed, would I still buy this?
- Good news, you can do all of this and still be happy! People always think spending money makes them happy, but it’s just not true in the long-term. Buying things fills a temporary void, but it’s only temporary. Creating an emergency fund will make you happy in the long-term. We promise!
- Focus on getting yourself ready for a job hunt, just in case! This is always a good best practice. Use any downtime you may have to brush up your skills. Take some free online courses. A lot of companies have been recently opening up their online courses for free, such as all of Yale’s courses on Coursera.org. Get your resume updated and ready. Overall, just get mentally and physically ready.
Mike uses his 60 seconds on the mic to walk us through his bedtime routine. And then Maggie takes over as usual.
Our top 3 takeaways for this episode:
- Create an emergency fund.
- Stop spending money.
- Get prepared mentally and physically to lose your job. Be ready! Prepare for the worst, and then be delighted every day someone keeps paying you to do something.
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Show References